The public relations industry has experienced something of a
watershed in the past couple of years. In 1995 international groups such
as Shandwick and Countrywide Porter Novelli became preoccupied with the
issue of branding.
While last year, it was the nuts and bolts of agency management that
came under the spotlight, with both owned groups and networks
rearranging the building blocks of their operations.
’We are entering a period of unprecedented change. You have to think
carefully about how you structure a pan-European capability to take you
into the next millennium,’ says Jonathan Simnett, board director of A
Plus - the lead agency in the Euro Plus network.
The ability to think globally but act locally has undoubtedly emerged as
a primary concern for international clients. But the PR industry still
appears uncertain about how to create the most effective structure to
meet client requirements.
At the same time, consultancies appear to be slowly waking up to the
fact that the real issue isn’t about creating a structure to suit
themselves, but a fluid one that suits clients needs - one that is
flexible enough to mirror a client’s own organisation.
’There is an atmosphere of reason that has crept into the international
market. An entrepreneurial approach that is is less dogmatic than it was
before,’ says Graham Lancaster chairman of Euro RSCG International
’There is no hard and fast rule, you have to look at the client, how it
is organised and what it is trying to achieve,’ agrees Nigel Kennedy
managing director of the Grayling Group.
Such fluidity of approach inevitably requires agencies to continually
reassess their operations. Mark Adams director mainland Europe of Text
100 believes that: ’If anyone works in Europe these days they should get
used to having an annual restructure. Client companies - technological
or otherwise - are uncertain how to manage European growth, it is still
new and there are still many organisational challenges.’
Burson-Marsteller was one of the first companies to break the
geographical mould and establish a client-oriented/practice-led
structure. European fee income subsequently surged by 15 per cent in
1996, supporting the agency’s claim that its shift of emphasis has led
to greater productivity.
Ogilvy Adams and Rinehart, also followed suit with its own brand of
’best-practice’ management, which has been described by executive
vice-president Marilou von Festel as ’a combination of practice and
’We agree which company works best with the client. A lot of companies
are enthusiastic about this approach because it stands to reason they
get the best agency for each country and the flexibility that offers,’
says Lyle Closs, acting head of OA&R in the UK, who also heads up the
agency’s IT practice group.
Euro RSCG is currently developing healthcare and financial practice
’Most companies nowadays are taking a B-M approach to a degree, but
local market excellence and branding still remain central,’ says
’Eighty-five per cent of Euro RSCG business remains a local offering
but, equally, you have to have the ability to develop cross brands
either for vertical markets and clients, or where they are working on a
cross-border basis. Some areas such as telecoms are better served than
others by a vertical market approach.’
Ketchum Worldwide has created four new global practices, but chairman
and CEO David Drobis talks about constructing a matrix which will take
account of not only practice but also regional differences
And there are very significant regional differences. While a
practice-led structure makes sense in a developed market such as Germany
or France, what happens when you have an office of, say, 12 people in a
smaller market such as Austria? Can an agency afford to carve its staff
down into specialist areas, risking the chance that its public affairs
department might walk out the door if head-hunted? While accepting the
increasing segmentation of developed markets as a sign of maturity,
Volker Stoltz, Shandwick’s managing director, continental Europe says he
still prefers an organisation that is office-organised - ’this is where
you go to recruit local people and have to make profit and losses’.
Adams of Text 100 is another advocate of a localised focus. ’The phrases
pan-European and global are almost passe,’ according to Adams. ’We don’t
talk pan-European, but multi-country clients. Most clients realise that
the only way to do PR is with a strong local unit. The people on the
ground (in client companies) deal with the day-to-day running and
You can’t say ’don’t deal with PR’.’
Concern about the differing levels of development in different markets
is also having an effect upon the structure of pan-European networks,
with many increasingly looking for a number of specialist agencies as
members in each country. Fishburn Hedges, Farner PR, Information et
Enterprise, Interel and Khotes and Klewes have gone so far as to form a
specialist financial network Global Financial Communications Network
Worldcom also secured its hold on the booming technology market and
boosted its world fee income by 22 per cent to pounds 88 million last
year largely on the back of its merger with hi-tech agency network
But how do you sew the seeds of a pan-European capability? Do you buy up
a local agency or merge your operation with another which already has
access to these markets, ensuring instantaneous access to regional staff
and know-how, but also risking the challenge of merging disparate agency
cultures? Or do you take the slow burn approach and build your presence
gradually in each country, ensuring a continuity of the agency
Or do you do both?
These have been the dilemmas facing companies such as Fleishman-Hilllard
- a consultancy with a tradition of strong organic growth in Europe, but
which, following its acquisition by Omnicom earlier this year, is
currently ironing out the details of its merger with sister company
Countrywide Porter Novelli. The likelihood is that the deal will deliver
the best of both worlds providing a presence in hitherto weaker markets,
while allowing for the autonomy of two strong brands.
Whatever approach an agency chooses, the challenge remains to provide
seamless client service across a enormous range of client markets.
Operating a seamless cross-border campaign across Europe isn’t easy -
but at the end of the day a client doesn’t want to know about the
hurdles that an agency has to overcome.
’Clients have the right to expect equivalent skills and equivalent
levels of implementation across consultancies,’ says Simnett, advocating
what he describes as the ’McDonald’s approach’. ’When you go to a
McDonald’s, no matter where in the world it is, you know exactly what
you are going to get. There are no surprises for the client and they
should know what they are going to get in terms of implementation and
TABLE RANKINGS: THE FACTS ON THE FIGURES
The 1997 PR Week European Consultancies League Table ranks owned groups,
networks and consultancies in leading European markets by calendar year
fee income. For the first time this year, PR Week has enlisted the
co-operation of trade associations in some of the main continental
markets in order to produce the most comprehensive cross-border league
tables in Europe. Syntec RP in France, Gesellschaft Public Relations
Agenturen (GPRA) in Germany, Associazioine Agenzie di Relazioni
Pubbliche a Servizio Completo (ASSOREL) in Italy, Association of
Consulting Companies in Public Relations and Communications (ADECEC) in
Spain and Bund der Public Relations Agenturen der Schweiz (BPRA) in
Switzerland advised on exact definitions of PR Week’s criteria to avoid
misunderstandings in the different markets. .
According to PR Week’s criteria, ’European income’ includes fees for PR
work carried out in the EU and Switzerland. It does not include income
relating to non-PR activities such as advertising, direct mail and
design etc. To avoid possible misinterpretation of the term ’mark-up’ in
different European markets, consultancies were asked for the first time
this year to submit fee income only. To avoid an imbalance in the tables
caused by use of different exchange rates, consultancies were also asked
to provide calculate sterling fee income figures for 1996 and 1995
according to a set average exchange rate (see below).
Once PR Week’s tables had been compiled, the trade associations in the
relevant countries checked members figures against their own records to
help ensure accuracy of the PR Week ranking.
Informal advice was also given in the early stages by the Belgian
association ABCRP/BGPRA and the Netherlands association the VPRA which
closed earlier this month.
For the 1997 PR Week European Consultancy League Tables local currency
was converted as per the average Financial Times exchange rates below
for 1996. For comparison purposes both 1996 and 1995 figures were
converted at the same rate.
The Netherlands 2.7